The Tsim Sha Tsui area of Hong Kong has maintained its ranking as Asia-Pacific's most expensive retail destination. Still, it sits in third place globally due to the pandemic restrictions that battered tourism.

The findings by Cushman & Wakefield show annual rents in Tsim Sha Tsui in Kowloon fell by 39% before the pandemic to $1,493 per square foot.

Whilst rents in Milan's Via Montenapoleone soared by 31% to $1,766 per square foot over the same time to become the world's second-most expensive retail area, trailing Fifth Avenue in New York with rents at $2,000 per square foot.

"Hong Kong's Tsim Sha Tsui is the most expensive regionally followed by Causeway Bay at $1,374 per square foot per year," according to the property consultancy's report.

Tsim Sha Tsui was ranked the most expensive location for retail rent in the world back in 2021, surpassing Causeway Bay. Yet the strict pandemic restrictions fuelled a recession due to plummeting tourist arrivals and retail sales, South China Morning Post reports.

"Although hampered by the global economic slowdown, Hong Kong's high street retail recovery remains resilient, supported by growth potential from its previous low base during Covid-19, while securing three of the top 10 spots in the [Asia-Pacific] prime retail ranking in 2023," said the executive director and head of retail services for Hong Kong at Cushman, Kevin Lam.

"We have observed notable changes in the retail landscape, with consumers increasingly opting for 'retailtainment', wellness and experiential offerings, which will help drive store upgrades and upward momentum in rents."

Hong Kong's Central has ranked as the eighth most expensive shopping area in the region, with annual rents of $673 per square foot. Whereas the three shopping districts in Hong Kong used in the survey have reported a fall in rents between 39% and 46% from pre-pandemic levels.

"Despite Hong Kong's tourism and retail industries' recovery following the border reopening, the government's data indicates that in the first half of the year, overnight and same-day visitor spending on shopping is at just 55% and 18%, respectively, of the level seen in the first half of 2018," according to Rosanna Tang, Cushman's executive director and head of research for Hong Kong.